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Prices And Incomes Board

Volume 894: debated on Tuesday 24 June 1975

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3.45 p.m.

I beg to move,

That leave be given to bring in a Bill to re-establish a Prices and Incomes Board.
The history of legislation on the question of statutory control over prices and incomes is a somewhat chequered one. The 1966 Prices and Incomes Act of the then Labour Government was supported throughout from the Liberal benches and at one point, during a crucial stage of the passage of that Bill, it was supported by us when our votes were essential because it was opposed by both the Conservative Opposition and a section of the Labour Party led by the right hon. Gentleman who is now the Secretary of State for Employment.

However, the passage of that Act and the creation of the Prices and Incomes Board under the chairmanship of a former Member of this House, Mr. Aubrey Jones, increasingly established a national reputation over the years during which it was in existence. It was, therefore, sad and foolish that the incoming Conservative Government of 1970 abolished the Prices and Incomes Board just at a time when it had achieved a national reputation and when it could have been of real assistance to that Government in controlling inflation.

However, within a couple of years the Conservative Government had repented of their folly, and they introduced the Counter-Inflation Act. They could not, of course, without losing face, recreate the Prices and Incomes Board, so they established instead a Price Commission and a Pay Board—two separate bureaucracies. Then the incoming Labour Government in February 1974 abolished the Pay Board.

We have to look at the situation as the country faces it today, and, as we have just heard during Question Time, there is a growing view in all parts of the House that it is high time the Government took positive action to attempt to control inflation.

I am encouraged in seeking leave to introduce the Bill by the words of the Prime Minister, when he was Leader of the Opposition, when he appeared on the BBC television programme "Twenty-four Hours" on 2nd March 1972. He said:
"A million unemployed: we cannot solve this without having some kind of anti-inflationary policy. We"—
meaning the Labour Party—
"would reinvoke our powers, the PIB."
Unfortunately, the Labour Government have not yet reinvoked those powers. My Bill is simply an opportunity for them to do so, because we have to look at the situation today in which, under the Healey formula—which was found so convenient at the last General Election—inflation is now running at a rate of 30 per cent., and in which most commentators believe that we are heading for an unemployment figure of over 1 million by the end of the year—the million which the then Leader of the Opposition thought was significant.

Most Governments are accused of promising jam tomorrow and never providing it today. This Government have stood that on its head. They threaten no jam tomorrow, and watch everyone helping themselves to large dollops of it today. Action is now required, and the Bill simply paves the way for a reintroduction of statutory controls over price increases and income increases.

The Board which the Bill would set up would have the powers which the old board had—that is, to undertake, at the request of the Government, specific investigations into areas of income; for example, the lower paid in certain industries. It would also have powers to receive specific remits from the Government.

We consider that it is the responsibility of the Government to take the political decision to say what percentage of growth either in prices or in incomes can be afforded by the country at any one moment. Those limits having been set, we would give powers in the Bill to Secretaries of State to refer to the Prices and Incomes Board any proposed increases which went above the norm set down by the Government at any time. The board would then undertake an investigation and would make a recommendation to the Government either to make exceptions or to restrict the increases to the figures already established by the Government.

At the end of the day the Government, who are responsible to this House, would take the decisions. In that respect the board would differ from the Pay Board established by the Conservative Government under the Counter-Inflation Act. The matter would remain a matter for political decision by the Government.

The Bill would be helpful in creating the machinery to establish a fair, expert and authoritative body which would help the Government when they finally come round to establishing statutory controls over price and income increases.

This House can delay no longer, and the Bill is happily timed to set up the necessary machinery.

3.50 p.m.

Yes, Mr. Speaker.

I rise to ask the House to refuse leave for the introduction of a Bill to re-establish a Prices and Incomes Board. From what the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) said, it is clear that he fully intends, if the Bill receives the leave of the House, not merely to reinvoke a Prices and Incomes Board but to endow it with all the rigmarle of statutory controls. He has said clearly that the proposed board would have powers of statutory control of prices and incomes. It is indicative of the fact that hon. Members who are supporting the hon. Gentleman and his Bill have learned nothing from the last 10 years that they seek the leave of the House to introduce such a Bill.

If we examine what has happened during the two periods when we have had statutory control of incomes, we find in those two periods the very causes of the kind of wage-led inflation we are experiencing today. For example, during the period of the previous Labour Government's incomes policy, one which many of my right hon. and hon. Friends supported at that time, we find that statutory control appeared to have worked particularly well in the public sector, but, while it was apparently working well there, there was a drift of wage increases of about 6 per cent. in excess of the norm in the private sector.

At the end of the period 1966–70 we found that the whole pattern of industrial disputes had changed. We found that the people who were getting involved in industrial action were people who had never resorted to such action in their history. We found that these were local authority manual workers, gas workers, Post Office workers, National Health Service employees, civil servants, teachers, and railway men—I could go through a long list—and every one of them in the public sector. The reason why we had that range of public sector disputes was that the incomes policy worked satisfactorily in the public sector according to the criteria laid down but it left the public sector far behind other areas of employment in the community.

It was then, when we had the massive round of industrial disputes, that we still found that during the period of operation of a statutory policy by the Conservative Government public sector employees got left behind. The reason why we had massive settlements for teachers, following the Houghton Inquiry, and for nurses, after the Halsbury Report, is that the statutory mechanisms of control could not adequately deal with the public sector.

Division No. 244.]

AYES

[3.54 p.m.

Biggs-Davison, JohnKnox, DavidTapsell, Peter
Ewing, Mrs Winifred (Moray)Lewis, Kenneth (Rutland)Thorpe, Rt Hon Jeremy (N Devon)
Freud, ClementMeyer, Sir AnthonyWainwright, Richard (Colne V)
Grimond, Rt Hon J.Morgan, GeraintWatt, Hamish
Grist, IanNelson, AnthonyWigley, Dafydd
Hawkins, PaulNewton, TonyYoung, Sir G. (Ealing, Acton)
Hooson, EmlynPage. Rt Hon R. Graham (Crosby)
Howells, Geraint (Cardigan)Penhaligon, DavidTELLERS FOR THE AYES
Irving, Charles (Cheltenham)Ross, Stephen (Isle of Wight)Mr. A. J. Beith and
Johnston, Russell (Inverness)Steel, David (Roxburgh)Mr. Cyril Smith.
Kelley, RichardStewart, Donald (Wesern Isles)

NOES

Allaun, FrankCant, R. B.Ellis, John (Brigg & Scun)
Anderson, DonaldCarter-Jones, LewisEvans, John (Newton)
Archer, PeterClemitson, IvorEwing, Harry (Stirling)
Ashley, JackCocks, Michael (Bristol S)Fernyhough, Rt Hon E.
Ashton, JoeCohen, StanleyFlannery, Martin
Atkins, Ronald (Preston N)Conlan, BernardFletcher, Ted (Darlington)
Atkinson, NormanCook, Robin F. (Edin C)Foot, Rt Hon Michael
Bagier, Gordon A. T.Corbett, RobinFord, Ben
Bates, AltCormack, PatrickForrester, John
Benn, Rt Hon Anthony WedgwoodCox, Thomas (Tooting)Garrett, John (Norwich S)
Bidwell, SydneyCryer, BobGarrett, W. E. (Wallsend)
Biffen, JohnCunningham, G. (Islington S)Gow, Ian (Eastbourne)
Booth, AlbertDalyell, TarnGrocott, Bruce
Bray, Dr JeremyDavies, Bryan (Enfield N)Hamilton, James (Bothwell)
Brown, Hugh D. (Provan)Davies, Denzil (Llanelli)Hamilton, W. W. (Central Fife)
Brown, Robert C. (Newcastle W)Davis, Clinton (Hackney C)Hardy, Peter
Buchanan, Richardde Freitas, Rt Hon Sir GeoffreyHarrison, Walter (Wakefield)
Budgen, NickDempsey, JamesHatton, Frank
Callaghan, Jim (Middleton & P)Dunnett, JackHayman, Mrs Helene
Campbell, IanDunwoody, Mrs GwynethHeffer, Eric S.
Canavan, DennisEdwards, Robert (Wolv SE)Hooley, Frank

I also ask the House to oppose the motion not only because what lies behind it does not work but because it involves a self-deluding process. If we imagine that merely by creating a statutory body we shall be getting a panacea which will deal with many of the things about which the hon. Member for Roxburgh, Selkirk and Peebles spoke—problems of inflation, of employment and of productivity—we are deluding the vast majority of the people as well as seeking to delude ourselves in the process.

I ask the House to acknowledge that the way that we shall deal with the problems of inflation is by grappling with the real problems of getting more productive wealth and establishing systems of industrial relations that get management, labour and capital to work more effectively together. We shall not do that by the mechanism of an industrial policy which has been directly responsible for industrial disputes.

I ask the House to reject the motion.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):

The House divided: Ayes 28, Noes 162.

Hordern, PeterMaynard, Miss JoanSpriggs, Leslie
Hoyle, Doug (Nelson)Mellish, Rt Hon RobertStallard, A. W.
Huckfield, LesMendelson, JohnStewart, Rt Hon M. (Fulham)
Hughes, Mark (Durham)Miller, Dr M. S. (E Kilbride)Stoddart, David
Hughes, Robert (Aberdeen N)Mitchell, David (Basingstoke)Stott, Roger
Hunter, AdamMorris, Charles R. (Openshaw)Taylor, Mrs Ann (Bolton W)
Janner, GrevilleNewens, StanleyThomas, Jeffrey (Abertillery)
Jeger, Mrs LenaOakes, GordonThomas, Mike (Newcastle E)
Jenkins, Hugh (Putney)Orbach, MauriceThomas, Ron (Bristol NW)
John, BrynmorOvenden, JohnTierney, Sydney
Johnson, James (Hull West)Page, John (Harrow West)Tinn, James
Jones, Alec (Rhondda)Park, GeorgeTomlinson, John
Jones, Dan (Burnley)Parker, JohnTorney, Tom
Judd, FrankPavitt, LaurieTuck, Raphael
Kaufman, GeraldPendry, TomWainwright, Edwin (Dearne V)
Kerr, RussellPowell, Rt Hon J. EnochWalker, Herold (Doncaster)
Kilroy-Silk, RobertPrescott, JohnWalker, Terry (Kingswood)
Kinnock, NellPrice, C. (Lewisham W)Ward, Michael
Lambie, DavidRadice, GilesWatkins, David
Lawson, NigelRichardson, Miss JoWatkinson, John
Lewis, Arthur (Newham N)Roberts, Albert (Normanton)Weitzman, David
Lewis, Ron (Carlisle)Roderick, CaerwynWellbeloved, James
Lipton, MarcusRodgers, George (Chorley)White, Frank R. (Bury)
Litterick, TomRoper, JohnWhitehead, Phillip
Lomas, KennethSandelson, NevilleWhitlock, William
Loyden, EddieSedgemore, BrianWilliams, W. T. (Warrington)
McElhone, FrankSelby, HarryWinterton, Nicholas
Mactarlane, NellShaw, Arnold (liford South)Wise, Mrs Audrey
Mackenzie, GregorSheldon, Robert (Ashton-u-Lyne)Woodall, Alec
McNamara, KevinShort, Mrs Renée (Wolv NE)Young, David (Bolton E)
Madden, MaxSillars, James
Mahon, SimonSilverman, JuliusTELLERS FOR THE NOES:
Marks, KennethSkinner, DennisMr, Joseph Dean and
Marshall, Jim (Leicester S)Snape, PeterMr, John Golding.
Mason, Rt Hon Roy

Question accordingly negatived.